Life Insurance Corporation of India (LIC) is an Indian
central public sector undertaking headquartered in
Mumbai
Mumbai (, ; also known as Bombay — the official name until 1995) is the capital city of the Indian state of Maharashtra and the ''de facto'' financial centre of India. According to the United Nations, as of 2018, Mumbai is the second- ...
,
Maharashtra
Maharashtra (; , abbr. MH or Maha) is a states and union territories of India, state in the western India, western peninsular region of India occupying a substantial portion of the Deccan Plateau. Maharashtra is the List of states and union te ...
,
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
. It is under the
ownership
Ownership is the state or fact of legal possession and control over property, which may be any asset, tangible or intangible. Ownership can involve multiple rights, collectively referred to as title, which may be separated and held by different ...
of
Ministry of Finance A ministry of finance is a part of the government in most countries that is responsible for matters related to the finance.
Lists of current ministries of finance
Named "Ministry"
* Ministry of Finance (Afghanistan)
* Ministry of Finance and Ec ...
,
Government of India
The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...
.
The Life Insurance Corporation of India was established on 1 September 1956, when the
Parliament of India
The Parliament of India (International Alphabet of Sanskrit Transliteration, IAST: ) is the supreme legislative body of the Republic of India. It is a bicameralism, bicameral legislature composed of the president of India and two houses: the R ...
passed the Life Insurance of India Act, nationalizing the insurance industry in India. Over 245 insurance companies and provident societies were merged together.
[https://www.licindia.in/getattachment/Bottom-Links/annual-report/LIC-Annual-Report-2015-16.pdf.aspx ]
LIC reported 290 million policyholders as of 2019, a total life fund of ₹28.3 trillion and a total value of sold policies in the year 2018–19 of ₹21.4 million. The company also reported to have settled 26 million claims in 2018–19. It ranked 98th on the 2022
Fortune Global 500
The ''Fortune'' Global 500, also known as Global 500, is an annual ranking of the top 500 corporations worldwide as measured by revenue. The list is compiled and published annually by ''Fortune'' magazine.
Methodology
Until 1989, it listed onl ...
list with a revenue of and a profit of .
History
Founding organisations
The Oriental Life Insurance Company, the first company in India offering life insurance coverage, was established in
Kolkata
Kolkata (, or , ; also known as Calcutta , the official name until 2001) is the capital of the Indian state of West Bengal, on the eastern bank of the Hooghly River west of the border with Bangladesh. It is the primary business, comme ...
in 1818. Its primary target market was the population of Europeans in India, and it charged Indians heftier premiums.
Surendranath Tagore
Surendranath Tagore (1872–1940) was a Bengali author, literary scholar, and translator. He is particularly noted for translating a number of works of Rabindranath Tagore to English.
Early life and background
A member of the Tagore family of ...
had founded Hindustan Insurance Society, which later became Life Insurance Corporation.
The Bombay Mutual Life Assurance Society, formed in 1870, was the first native insurance provider. Other insurance companies established in the pre-independence era include:
* Postal Life Insurance (PLI) was introduced on 1 February 1884
* Bharat Insurance Company (1896)
*
United India (1906)
* National Indian (1906)
*
National Insurance
National Insurance (NI) is a fundamental component of the welfare state in the United Kingdom. It acts as a form of social security, since payment of NI contributions establishes entitlement to certain state benefits for workers and their famil ...
(1906)
* Co-operative Assurance (1906)
* Hindustan Co-operatives (1907)
* The New India Assurance Co Ltd (1919)
* Indian Mercantile
* General Assurance
* Swadeshi Life (later Bombay Life)
* Sahyadri Insurance (Merged into LIC, 1986)
These companies were established when India was marked mostly by turbulent economic and political conditions including the
Indian rebellion of 1857
The Indian Rebellion of 1857 was a major uprising in India in 1857–58 against the rule of the British East India Company, which functioned as a sovereign power on behalf of the British Crown. The rebellion began on 10 May 1857 in the fo ...
,
World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
and
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
. The effect of these events led to a high liquidation rate of life insurance companies in India and adversely affected the faith of the general public in the value of obtaining life insurance.
Nationalization in 1956
In 1956, parliamentarian
Feroze Gandhi
Feroze Gandhi (born Feroze Jehangir Ghandy;: "Feroze Gandhi was also from the Nehrus' home town, Allahabad. A Parsi by faith, he at first spelt his surname 'Ghandy'. However, after he joined the national movement as a young man, he changed th ...
raised the matter of insurance fraud via owners of private insurance agencies. In the ensuing investigations, one of India's wealthiest businessmen,
''Times of India'' owner Sachin Devkekar, was sent to prison for two years.
Initial public offering
Finance Minister
Nirmala Sitharaman
Nirmala Sitharaman (born 18 August 1959) is an Indian economist and politician serving as the Minister of Finance and Corporate Affairs of India since 2019. She is a member of the Rajya Sabha, upper house of the Indian Parliament, since 2014. ...
announced a proposal to conduct an
initial public offering
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
for LIC in the
2021 Union Budget. The IPO is expected to occur in 2022, and the Government of India will remain the majority shareholder after the public listing. Ten percent of shares are proposed to be allotted to existing LIC policyholders. In year 2021, the government of India had proposed to significantly enhance the authorised capital of the LIC of India, to to facilitate its public listing scheduled for the next fiscal year which will begin on 1 April.
Due to the scale of the offering and the LIC's ownership structure, the deal has been referred to as "India's Aramco moment" in reference to the comparable
2019 IPO of Saudi Aramco.
The LIC announced it would open its IPO to the public on 4 May 2022, and the process would be concluded on May 9. Through this IPO, the
Government of India
The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...
is now aiming to raise ₹21,000 crore, as opposed to raising between ₹65,000 crore to ₹70,000 crore by diluting the 5% equity earlier. As per the IPO price band for 3.5% stakes for ₹21,000 crore, the valuation comes to around ₹6 lakh crore.
Structure
The Central Office of LIC is based out of Mumbai. There are a total of 8 zonal offices, located in
Delhi
Delhi, officially the National Capital Territory (NCT) of Delhi, is a city and a union territory of India containing New Delhi, the capital of India. Straddling the Yamuna river, primarily its western or right bank, Delhi shares borders w ...
,
Chennai
Chennai (, ), formerly known as Madras ( the official name until 1996), is the capital city of Tamil Nadu, the southernmost Indian state. The largest city of the state in area and population, Chennai is located on the Coromandel Coast of th ...
,
Mumbai
Mumbai (, ; also known as Bombay — the official name until 1995) is the capital city of the Indian state of Maharashtra and the ''de facto'' financial centre of India. According to the United Nations, as of 2018, Mumbai is the second- ...
,
Hyderabad
Hyderabad ( ; , ) is the capital and largest city of the Indian state of Telangana and the ''de jure'' capital of Andhra Pradesh. It occupies on the Deccan Plateau along the banks of the Musi River (India), Musi River, in the northern part ...
,
Kanpur
Kanpur or Cawnpore ( /kɑːnˈpʊər/ pronunciation (help·info)) is an industrial city in the central-western part of the state of Uttar Pradesh, India. Founded in 1207, Kanpur became one of the most important commercial and military stations o ...
,
Kolkata
Kolkata (, or , ; also known as Calcutta , the official name until 2001) is the capital of the Indian state of West Bengal, on the eastern bank of the Hooghly River west of the border with Bangladesh. It is the primary business, comme ...
,
Bhopal
Bhopal (; ) is the capital city of the Indian state of Madhya Pradesh and the administrative headquarters of both Bhopal district and Bhopal division. It is known as the ''City of Lakes'' due to its various natural and artificial lakes. It i ...
and
Patna
Patna (
), historically known as Pataliputra, is the capital and largest city of the state of Bihar in India. According to the United Nations, as of 2018, Patna had a population of 2.35 million, making it the 19th largest city in India. ...
.
Liberalisation post 2000s
In August 2000, the
Indian Government
The Government of India (ISO 15919, ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the Government, national government of the Republic of India, a federal democracy lo ...
embarked on a program to liberalise the insurance sector and opened it up to the private sector. The LIC benefited from this process and in 2013 reported the first year premium
compound annual growth rate
Compound annual growth rate (CAGR) is a business and investing specific term for the geometric progression ratio that provides a constant rate of return over the time period. CAGR is not an accounting term, but it is often used to describe some ele ...
(CAGR) was 24.53% while total life premium CAGR was 19.28% matching the growth of the life insurance industry and outperforming general economic growth.
Awards and recognitions
The Economic Times Brand Equity Survey 2012 rated LIC as the 6th Most Trusted Service Brand of India. The LIC was also voted India's Most Trusted brand in the BFSI category according to the Brand Trust Report from 2011 to 2014.
Golden Jubilee Foundation
The LIC Golden Jubilee Foundation was established in 2006 as a charity organization. The entity has the aim of promoting education, alleviating poverty, and providing better living conditions for the underprivileged. The Golden Jubilee Scholarship award is one of the best known parts of the foundation. Each year, this award is given to the meritorious students in the 12th standard who wish to continue their studies, and have a parental income less than .
Financial
Holdings
The LIC invests in sectors such as banks, cement, chemicals and fertilizers, electricity and transmission, electrical and electronics, engineering, construction and infrastructure, fast-moving consumer goods, finance and investments, healthcare, hotels, information technology, metals and mining, motor vehicles, and ancillaries, oil and natural resources, retail, textiles, transportation, and logistics.
See also
*
Insurance in India
Insurance in India covers both the public and private sector organisations. It is listed in the Constitution of India in the Seventh Schedule as a Union List subject, meaning it can only be legislated by the Central Government only.
The insuran ...
*
Insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
*
LIC Housing Finance
LIC Housing Finance Limited (LIC HFL) is one of the largest Housing Finance Mortgage loan companies in India having its Registered and Corporate office at Mumbai. LIC HFL is a subsidiary company of LIC.
The main objective of the company is t ...
References
External links
*
{{DEFAULTSORT:Life Insurance Corporation Of India
2022 initial public offerings
Financial services companies based in Mumbai
Government-owned insurance companies of India
Financial services companies established in 1956
Life insurance companies of India
Indian companies established in 1956
1956 establishments in Bombay State